Comments: Albert Wenger has a great post explaining why you should read “Skin in the Game” that sums up my thoughts. Nassim Taleb is a brilliant jerk and it comes through in the book. There are moments of brilliance that make it well worth the experience and then there are moments when you are left shaking your head at his desire to pick fights and insult people for the sake of doing so. Albert also makes a great point at the end about reading books from folks we may not always agree with – “This is a good moment to point out that we should all seek out writers with whom we disagree at least some of the time. If we only read books by authors where we agree with every one of their tweets, why bother? What are we expecting to learn? Too many times we are letting our emotional reaction to something an author has said or done stand in the way of engaging with their arguments. Taleb certainly provokes a strong reaction at times, but by all means read “Skin in the Game” nonetheless.”

Top 3 Lessons:

When someone says it is good for you when it is also good for them and when they don’t face downside, it isn’t good for you.

Better fences make better neighbors. It is easier for people to like each other as neighbors than roommates. Interventionists keep trying to get people to not act sectarian when being sectarian is in our nature. Better to use that to keep groups and design systems that encourage us to work with each other. (Powerful implications in management and life)

Loss aversion doesn’t exist (big statement!). The flaw in psychology papers is to believe that the subject doesn’t take any other tail risks anywhere outside the experiment and will never take tail risks again. The idea of “loss aversion” have not been thought through properly –it is not measurable the way it has been measured (if at all mesasurable). Say you ask a subject how much he would pay to insure a 1% probability of losing $100. You are trying to figure out how much he is “overpaying” for “risk aversion” or something even more stupid, “loss aversion”. But you cannot possibly ignore all the other present and future financial risks he will be taking. You need to figure out other risks in the real world: if he has a car outside that can be scratched, if he has a financial portfolio that can lose money, if he has a bakery that may risk a fine, if he has a child in college who may cost unexpectedly more, if he can be laid off. All these risks add up and the attitude of the subject reflects them all. Ruin is indivisible and invariant to the source of randomness that may cause it.

Comments: I loved Niall Ferguson’s previous book – “The Ascent of Money.” It had lots of interesting historical nuggets.. but, somehow, the book didn’t work for me. Perhaps it was just not what I was seeking when I read it..

Comments: A perspective changer. I was aware of the IMF, The World Bank and the World Trade Organization thanks to social science classes in middle school. But, I had no idea of the role they play in (arresting) the development of developing nations.

Top 3 Learnings:

1. Every developed country rose to power thanks to protecting infant industries via imposing tariffs or protecting patents. But, they’ve sold the idea of free markets to the world so it is impossible for countries developing right now to do it. The US was the most protectionist country in the world until the Second World War and grew the fastest. Britain and the US had tariffs as high as 50%.

2. This is particularly because the IMF, World Bank and WTO (i.e. the bad samaritans) are run by developed countries and only offer aid in exchange for policies that suit developed countries. It is very hard for poor countries to out-negotiate the rich countries in Geneva given paucity of resources.

3. In the first few years after 1900, multiple books described the Japanese as lazy, care free and emotional people. Similarly in the 1800s, the British and French described Germans the same way.
Economic development often creates the culture it needs. Hard work, time keeping, frugality often follow economic development.

Comments: A game changing book. It is long, dense and takes a while to get through. But, my oh my, it is worth it. I love books that look at all of human history through various lenses. This one tells the story of Homo Sapiens and beautifully weaves in all that is ugly, beautiful and miraculous all at once. It is the best book on history that I’ve read. A perspective changer.

Top 3 Learnings:

1. Fiction. Thanks to language, we were able to speak about abstract concepts and/or fiction. It is one of the unique aspects of our language and mental ability. This enables us to create myths and stories (religion, nationalism) that enables us to cooperate flexibly in large groups. These creative myths and stories dominate our life today – countries, religions and businesses are all myths that we buy into. And, it is this fiction that enables us to cooperate with each other.

Human to ape, we don’t differ by much. However, in groups, the difference is massive thanks to this ability to believe. “In 2011, The UN asked Libya to adhere to human rights. Of course, the UN, Libya and Human rights are all fictional.” :)

2. Agricultural revolution. The agricultural revolution is the world’s greatest fraud story. We didn’t domesticate plants. Wheat, Maize and Rice domesticated us. Domesticated comes from the Latin word domus which means at home. It is humans who stayed at home. And, not just ate – began eating a diet that wasn’t anywhere as nutritious since it lacked variety, had to work very hard to keep these plants happy and suffer if pests or the weather attached them. But, it helped us with one metric – multiplication. More people could be supported by agriculture under much worse conditions.

3. Industrial revolution and energy. The industrial revolution has really been about our ability to convert energy into forms we can use. Steam engine then oil enabled us to mass produce and ship raw materials around the world. The prime example of this is farming – especially animal farming. We mass produce animals like never before, subjecting them to horrible conditions that deprive them of all emotion or sensory stimulation. Like slavery, such cruelty is borne, not out of hate, but out of indifference.

Comments: I debated about whether this should be category 1 or 2. On the one hand, this book is very focused on the history of information empires in the United States. But, on the other, information empires are THE dominant corporations in today’s world. So, this book become a must read. :)

Top 3 Learnings:

Every information industry (phone, radio, film, tv, internet) has seen a struggle between open versus closed / decentralized versus centralized. Every one of these started out with hackers and hobbyists and then became the home of large monopolies.

What we think is a by product of what we read and who listen to. Free speech and a marketplace of ideas are not as dependent on the values of a place as much as the structure of the information infrastructure.

This isn’t as much a learning as much as a note that I remember so many stories from the book. The story of the creation of hollywood, the rise, fall and rise of AT&T, CBS, etc., still give me goosebumps. A hat tip to Tim Wu for a wonderfully written book.

Comments: This is a book that takes 6 parts of modern life and shows you how they were fundamental in making modern life what it is. It changed how I saw the world.

Top 3 Learnings:

1. Most innovations occur in the adjacent possible. Few make seemingly impossible leaps. The popular theory is the genius theory of innovation. But, there are plenty of high IQ individuals. If there is a common thread, it is that they worked at the intersection of multiple fields. Ada Lovelace could see the future of computers as she lived at the edge of science and art. Staying within the boundaries of your discipline can enable incremental improvements – which are critical to progress. But, to make leaps, we have to travel across borders – sometimes geographical to be in a different environment and sometimes conceptual. These time travelers often have hobbies and interests in varied fields. This is one of the reason “garages” have such a symbolic role in innovation as these are peripheral spaces.

2. The power of accurate measurement of time is that measuring time is key to measuring space. Every time we glance down at our phone to find our location, we’re triangulating between at least 3 of 24 atomic clocks that tell us our location based on the measurement. And, these clocks have been made possible by scientific advances that led us from astronomy (sundials) to dynamics (pendulums) to electromagnetics (quartz) to atomic physics (atomic clocks)

3. Thomas Edison didn’t invent the light bulb. Instead, he invented something more powerful – a process of innovation. He brought together diverse teams, built the first global supply chain, mastered the art of public relations and product launches, embraced experimentation and incentivized his teams with stock options. This is a model that continues today.

Comments: I understand this book wouldn’t be for everyone. However, if you have any interest in science and the life and works of Albert Einstein, I’d suggest taking your time reading this one. The middle portion might get a bit boring. But, the end is worth it. Walter Isaacson takes his time to develop Einstein’s character. And, by the end, you realize that the time taken was completely worth it.

I began reading to understand Einstein the genius. And, I finished understanding Einstein, the wise human being. :)

Top 3 Learnings:

1. Einstein’s genius wasn’t about his brain but how his mind works. He was the true example of endless curiosity. You can imagine him as a kid lying sick and wondering about how the compass works and then wondering what it might be like to travel alongside a wave.

2. The most striking thing about Einstein was his wry detachment and equanimity. He never took himself or his work seriously. He may have blown hot or cold with his family when he felt confined. But, otherwise, he was a passionate and caring man who was adored by his colleagues. They hosted a wonderful 70th birthday ceremony where they spoke more about his character than his work.

He used his old age to defend the rights of those who were young and to use the luxury of his reputation to pursue his field theory. However, over the years, he relied more on complex math than the physics that had made him great. A part of his resistance was his now quaint refusal to accept quantum mechanics.

3.Is everything alright? “Everything is alright. I am not.” – he said to his secretary on his last day at the institute. :) His “wry detachment” is evident.